BTN Reveals Impact of Global Conflicts on Housing Materials: Iron and Steel Most Vulnerable

Geopolitical tensions and global conflicts are beginning to impact the housing sector, particularly certain building material components that still rely on imports. However, in general, the Indonesian housing sector is considered sufficiently resilient because the majority of building materials are sourced domestically.

The Head of the BTN Regional Office for East Java, Bali, and Nusa Tenggara, Bagus Hendram Setiawan, stated that building components such as iron and steel are the materials most vulnerable to exchange rate fluctuations due to import dependency. “There are indeed several housing components that seem to be affected. Materials like iron or steel are quite impacted if there are fluctuations in the exchange rate because they depend on imports,” he told reporters in Denpasar on Monday (8/6/2026).

Furthermore, developers are currently facing challenges in maintaining profit margins amidst rising production costs. “Our developer partners may see slightly reduced margins. They have to work hard to manage this, looking for where efficiencies can be implemented,” he continued.

Nevertheless, Bagus emphasised that the housing sector as a whole is not heavily impacted because most materials used are locally based. According to him, the proportion of imported materials in house construction is relatively small. “In reality, housing is relatively local-based. The items used to build houses or the materials used in housing are relatively local,” he noted.

Bagus cited key materials such as cement and bricks, which are produced domestically, as being less affected by global trade volatility. He estimated that approximately 80 per cent of house construction materials still originate from within the country. “We have our own cement industry, and bricks are also relatively local. There are certainly pressures regarding price impacts due to the rising costs of oil and fuel, among others,” he added.

Additionally, he assessed that players in the housing sector have experience navigating various economic crises, ranging from the early 2000s crisis to the 2008 global financial crisis, and are therefore capable of adapting to current conditions. Bagus expressed hope that public purchasing power and housing affordability would be maintained through the 3-million-house programme and the distribution of mortgages (KPR) for low-income communities (MBR).